AIICO Insurance Plc, a leading non-banking financial services provider in Nigeria, is facing 34 court cases from clients and other affected individuals/entities, as directors’ compensations and allowances rise by 38.54 percent between March 2023 and March 2024.
According to the insurer’s first quarter (Q1) 2024 financial statement seen by Economy Post, the company is not bothered by the court cases as the litigations do not have the capacity to impact or derail its operations.
“There were 34 outstanding cases at the end of Q1 2024 with a total claim of ca. N2.33bn,” the company said in its financial statement sent to the Nigerian Exchange Group.
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“The Directors, having sought legal opinion, are of the view that the Company stands a good chance on those cases and hence do not foresee those cases having any material effect on the Company’s results and financial position. Therefore, no provisions have been made in the financial statements,” it noted.
The company also gave the details of its legal tussles with a firm named Megamond Investment Limited and Idemnity Finance Limited, which has lasted for many years.
“Some time ago,” the insurer said, “AIICO Insurance Plc (“the Company” or “AIICO” or “the Claimant”) filed a suit against Megamound Investment Limited and Indemnity Finance Limited (“the defendants”) for the recovery of its outstanding loan plus interest of N1.4b. Although the defendant, via a letter dated 9 Nov 2007 allocated 1.5 hectares of = land (1.089 hectare, if the portion allocated for common areas is considered) at Lekki County Estate to the Company, it never effected a transfer. The Claimant sought and obtained a judgement of the court in terms of the loan.
“The Court, via a judgement dated 30 May 2014, ordered that the defendants execute and deliver to the Claimant the property in respect of the 1.5 hectares of land at Lekki County Home Estate, excluding the area marked for provision of common services. The Court further ordered that possession should be granted to the Claimant of the 1.5 hectares of land at Lekki County homes Estate, excluding the areas marked for the provision of common services measuring 4,108.5 square metres. AIICO commenced execution of this judgment on 6 January.”
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AIICO Insurance Plc alleged that it sought to take over the property but the management of Lekki County Estate obstructed it from taking possession of the allocated land while also harassing and assaulting its staff.
It said AIICO Insurance had not recognised this land in its books due to the problem but had made a disclosure of its existence while filing requisite actions, including contempt of court proceedings, against the management of Lekki County Estate.
“The Company has taken further steps required for the purposes of enforcement of the judgement,” it noted.
AIICO Insurance Plc said there had been two court judgements against it as at the end of Q1 of 2024, adding that it had appealed the judgments.
Directors’ allowances, compensations jump
Meanwhile, directors of the insurance company smiled to the bank in Q1 of 2024. The directors’ allowances and compensations jumped 38.54 percent to N126.651 million in Q1 of 2024 from N91.418 million posted in the corresponding period of 2023.
Chairman’s earnings jumped 167 percent to N4 million in Q1 of 2024 from N1.5 million in the corresponding period of 2023. The earnings of the highest paid director skyrocketed from N1.028 million in Q1 of 2023 to N62.230 million in 12 months to Q1 of 2024.
Impressive financial amid low penetration
Amid poor insurance penetration in Nigeria, AIICO Insurance grew revenue by 53 percent to N22.669 billion from N14.839 billion reported in the corresponding period of 2023.
Profits jumped by 512 percent to N8.786 billion from N1.434 billion posted in the same period of 2023. Comprehensive income for the period rose by 749 percent to N7.506 billion from N884.465 million in Q1 of 2023.
Insurance penetration in Nigeria is estimated at 0.5 percent, which is among the lowest in Africa, says Leadway Assurance. Only 0.5 percent of Nigerians are insured and merely 3.4 million of 12 million vehicles in the country have insurance stamps on them.
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The industry’s gross premium income stands at N520 billion, with only 3 percent of Nigerians having health insurance.
“The Nigerian Insurance industry faces a series of challenges but the top four are: inappropriate pricing and risk profiling, poor product-market fit, inadequate distribution channels, and low public confidence,” says Leadway Assurance.
